NBTC ponders 2.3/2.6 GHz spectrum recall as it realizes sub-letting isn’t legal

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The future of Thailand’s two spectrum tie-ups on 2.3 GHz and 2.6 GHz is looking uncertain after the NBTC raised the thorny issue of sub-letting, and recommended as a solution simply recalling and re-auctioning both bands, rather than allowing partnerships to go ahead with their former state-enterprise license-holders.

State telco TOT currently has 64 MHz on the 2.3-GHz band, and has been looking to do a deal with a private sector operator not unlike existing deals where TOT sub-lets its 2100-MHz band to AIS, and CAT Telecom sub-lets 850-MHz to TrueMove. These are effectively backdoor concessions where the state telco acts only as a rent collector – which, at a glance, would be illegal under Section 46 of the NBTC Act:

Section 46 A: spectrum license for telecommunications business is the exclusive rights of the licensee and is not transferable. The licensee who has been authorized to use spectrum for telecommunications services shall carry out the services by himself or herself. Business management either in whole or in part shall not be rendered or permitted to other to act on his/her behalf.

However, in January 2013, an NBTC sub-committee set up to investigate the True-CAT 850-MHz deal controversially ruled that the telcos had broken the law unintentionally and thus should not be punished, paving the way for TOT-AIS to copy the arrangement for their own 2100-MHz de facto concession.

In both deals the state telco coughs up cash in advance for the passive metal and concrete infrastructure, and on paper serve as the “MNO” but with their so-called “MVNO” taking the bulk of the capacity (80% in the case of TOT-AIS).

With True having a de facto concession on 850-MHz and AIS having one on 2100 MHz, all eyes were on whether this centrally planned oligopoly stitch-up would result in Dtac landing a similar deal with TOT for the 2300-MHz band. Up until now everything seemed to be on course for a Dtac-TOT 2300 tie-up.

However, for the first time, the NBTC has actually looked at the law, and at its board meeting on 21 February quoted Section 46 as it noted that in October 2015 the board had authorized TOT to develop 2.3 GHz for LTE, granting them a license to cover their existing use of that band until August 2023.

The NBTC board ruled that TOT’s 2.3-GHz plan did not meet the definition of a wholesale-retail agreement, and that the proposed operator (Dtac) was not an MVNO but a full MNO. It noted that even if TOT were to operate the network itself, it would not count as a wholesale-retail agreement (and would break laws in which the state is not allowed to compete with private sector telcos).

The board concluded that giving 60 MHz to TOT was an inefficient waste of spectrum and money, and recommended that if the telecoms sub-committee so agreed, it should revoke TOT’s 60-MHz for re-allocation under Section 47 that allows recall of unused spectrum.

Why buy back MCOT spectrum when you can get it for free?

Meanwhile, the NBTC recently announced plans to buy back 80 MHz of 2.6-GHz spectrum currently allocated to MCOT (formerly the Mass Communications Authority of Thailand) for auction later this year.

However, three NBTC Commissioners have opposed the buyback plan, arguing that since MCOT has not used the spectrum, it can be simply be recalled for auction under Section 47 without the need to pay any compensation:

Section 47: Any licensee who has been authorized to use spectrum for telecommunications services has not carried out the business by using such spectrum within period specified by the NBTC or by using such spectrum in other services not relating to its objectives or fails to comply with the business operation conditions, or conducts prohibitive acts as specified in Section 27 (11), or fails to comply with the provision of Section 46, the NBTC shall take action to rectify the situation or issue an order to revoke the spectrum license in whole or in part.

The issue of 2.5/2.6 GHz has been popping up again and again during the recently 1800- and 900-MHz auctions. Every time there is an auction, politicians (most notably former Deputy Prime Minister Jatumongkol Sonukul and Deputy Deputy Junta Leader Prajin Junthong) suddenly announce a 2.6-GHz deal with MCOT, only have the deal fall through later. Whether this is an attempt to influence the auction price or simply test the waters to size up the potential for MCOT’s 80 MHz is unclear.

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